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If a person survives 7 years after making a PET, the transfer is fully exempt and ignored for the purpose of IHT. But it is stated that it could still use up annual exemptions; could you please give me an example to illustrate this?
And also please refer, Chapter 24 – Inheritance Tax of the OT Course Notes, Example 1: why is the PET made to Joe’s son on 8 December 2010 not considered for IHT under lifetime transfers chargeable on death?
Thank you!
Hi Rebekah, glad you have resolved problems. Hopefully you discovered that in example 2 on p.145 the June 2002 CLT does not get the use of the previous year’s AE (01/02) as this has been allocated to the October 2001 PET even though it never becomes chargeable!
In example 1 you have hopefully listened to the lecture which of course deals with the PET which somehow did not find its way into the answer in the back. My apologies if this omission caused you any problems.
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